NEWS

ALBANY—New York Power Authority President and Chief
Executive Officer Eugene W. Zeltmann has urged the state’s 51 municipal
electric systems and rural cooperatives to mount aggressive
energy-conservation efforts in response to “increases in electricity
costs that could reach crisis proportions.”

“Never has saving electricity—and all forms of
energy—been more critical,” Zeltmann said in an Oct.13 letter to mayors
and utility officials in the municipal system and cooperative service
territories.

Zeltmann noted that average electricity costs on
New York State’s wholesale markets in September were more than double
those of a year earlier and that costs for this year through the end of
September were 45 percent higher than in the comparable period last
year. He said continued tight supplies and high prices for natural gas
and oil, two of New York’s principal power plant fuels, have made
“soaring costs on the state’s power markets all but inevitable” for this
winter.

He said that, thanks to Gov. George E. Pataki’s
leadership, New York State is well positioned to address the problem,
through energy efficiency and increased use of clean, renewable energy
sources such as wind and solar power.

“These initiatives are essential not only to combat
high costs,” Zeltmann said, “but also to help clean our air and reduce
our dependence on foreign oil.”

Heightened efforts to conserve electricity are
particularly important for the municipal systems and cooperatives,
Zeltmann said, since most of them experience their greatest demand for
power in the cold-weather months, when many residents use electricity to
heat their homes.

“The stakes are high and the warnings are clear,”
he said. “A long winter lies ahead. It will tell a good deal about our
ability to meet our energy challenges in a responsible manner that puts
us on a solid footing for the future.”

All of the municipal systems and cooperatives
receive low-cost Power Authority hydroelectric power, which is not
affected by rising fuel prices. However, Zeltmann noted, the systems
must purchase additional energy to meet needs beyond their hydroelectric
allocations. The price of this energy on New York State markets is set
by the cost of the most-expensive electricity required to meet overall
needs.

“Those of you buying on the markets are therefore
directly affected by the high prices of natural gas and oil,” Zeltmann
said in his letter. “The incentive to make your hydropower go further
by using it more efficiently could not be more evident.”

Zeltmann congratulated the 18 municipal systems
that have been participating in an Independent Energy Efficiency Program
and said the Power Authority is working with all the municipal systems
and cooperatives on a major new initiative. He said information
collected from 24 systems in the new program’s first phase shows “that
we can achieve meaningful energy savings at reasonable cost.”

In addition to the formal programs, Zeltmann asked
the municipal systems and cooperatives to “strongly encourage all of
your customers to do all that they can as individuals to save
electricity and to use it wisely—whether by turning out lights,
adjusting thermostats or weatherizing their homes. Unfortunately, they
must recognize that they are now subject to some of the same cost
pressures that beset those who warm their homes with natural gas,
heating oil or propane, rather than electricity.”